The United States Department of Agriculture is forecasting pork production for 2019 at 27.662 billion pounds — 360 million pounds higher than the forecast presented a month ago. The June inventory survey pointed to larger inventories of hogs available for marketing this summer and the pig crop for the Mar-May period was 3.7 percent higher than a year ago, which likely caused USDA to up its slaughter/production estimates for the fall months.
Tyler Fulton of HAMS Marketing Services is advising swine producers to watch for any rallies in the futures market and consider locking in fourth-quarter hog prices.
About the USDA’s second-quarter Hogs and Pigs Report, Fulton said it showed an unprecedented eight percent year over year increase in U.S. slaughter hog numbers further pressuring hog prices and adding to the volatility of the past several months.
He said as large as the hog numbers are and as burdensome as the pork inventory has grown this took the industry to another level, further increasing pressure on both the cash and futures markets.
China is expected to increase pork imports to make up deficits resulting from African Swine Fever, but there are constraints such as its trade friction with the United States.
“African Swine Fever is established now in Vietnam, and it’s moving through Southeast Asia, so we’re not necessarily beholding to what these issues are in China,” said Fulton. “And to some degree, it’s a bit of a shell game where, if European suppliers concentrate filling that deficit in China, that may open up opportunities for North American pork in other destinations where the Europeans had the foothold. But there’s no tangible shift in sales patterns yet.”
He said there is minimal certainty as to what the timeline would be behind any kind of increased exports to Asia.
“We think that if we were to get a good recovery, even a 25 percent recovery back to some of the highs that we saw, just 25 percent, that might be a decent pricing point to cover some or more of your fourth-quarter production,” said Fulton. “It’s really not clear as to when we will start to see some price movements that reflect increased exports so I think in that circumstance if you can secure good profitable prices in the fourth quarter, which is not the norm, then it’s probably a prudent action to do a portion of your production.”

Fulton said producers should look for any rallies and react accordingly.
“We see a continuation of unprecedented volatility. The market is struggling with trying to reconcile the near term heavy supplies and sufficient production levels against the possibility of exceptional demand, in particular in the export markets as a result of the ASF. Those two are at odds with each other,” he said.
Hog commentator Jim Long who spoke recently at the National Pork Industry Conference (NPIC) in Wisconsin Dells, Wisconsin, and U.S. said about 960 people registered at the conference.
“Our premise is that right now the USA-Canada market depends on when and if China begins large shipments of pork to China,” said Long. “In our talk, we pointed out why we know and pay attention to China. Genesus in the last three years has exported more than 35 percent of all breeding stock shipped to China from anywhere in the world. It follows the money trail. It’s our vested interest to pay attention to when the massive airlift begins to restock Chinas breeding herd. Currently, we have several 747 shipments of breeding stock on hold until China’s customs feel comfortable to import.”
Long said hog prices in the U.S. and Canada are under siege; it’s discouraging and financially hurting.
“Maybe, we are the boy that sees the Pony in the Manure Pile. Maybe, but we can’t ignore what we hear and see!”
Jim Long passed on some unique quotes of people at the conference.
“Our budget is down 4 million hogs for this year due to ASF” – very big China Producer-Owner
“We had 70,000 sows, now 30,000. We are in the feed business.
We just had a conference call with many other Chinese feed companies. Feed production down 60 percent.” said an owner-producer
“With government inspecting and testing storage stocks for ASF beginning July 1, storage is being emptied.” said a producer-packer
“We had 15,000 sows; now we have none!” – Producer
“Had 60,000 sows in North-East now 6,000.” – Producer •
— By Harry Siemens